He had also designed the sound processor for the Super NES. With Sony, he designed the VLSI chip which works in conjunction with the PS1's RISC CPU to handle the graphics rendering. Kutaragi was closely watched by financial analysts who trace profiles of the losses and profits of the Sony Corporation.

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Ken Kutaragi was born in Tokyo, Japan. His parents, although not wealthy by Japanese standards, still managed to own their own business, a small printing plant in the city. As Kutaragi grew into childhood, they actively encouraged the young boy to explore his mechanical abilities in the plant, and he worked after school there. Aside from his duties in his parents' factory, Kutaragi was a studious, high-level student; he was often described as a "straight A student."

Kutaragi always had the desire to "tinker", often taking apart toys as a child to see how they worked. This curiosity carried from childhood, leading him as a teenager to learn the intricacies of electronics. Eventually, in fact, his love of electronics led to him enrolling in University of Electro-Communications, where he acquired an Electronics degree.

Immediately after graduation, Kutaragi began working for Sony in their digital research labs. Although at the time it was considered a radical decision, Kutaragi felt that Sony was on the "fast track". He quickly gained a reputation as an excellent problem solver and a forward thinking engineer, earning that reputation by working on many successful projects - including early liquid crystal displays (LCDs) and digital cameras.

In the late 1980s, he was watching his daughter play a Famicom and realized the potential that existed within video games. At that particular time, Sony's executives had very little interest in video games. Thus, when Nintendo expressed the need for a wave-table sound chip for its upcoming new 16-bit system, Kutaragi immediately accepted. Working in secret, he designed and built the chip, the SPC700. When they found out, Sony's executives were furious. Only with Sony CEONorio Ohga's help was Kutaragi able to push the project to completion and keep his job.

Even while working with Nintendo, within Sony, gaming was still regarded as a fad and something looked down upon. Despite this hostile atmosphere to video games, Kutaragi managed to persuade Sony to fund his research into the Super FamicomCD-ROM Adapter. These efforts resulted a device called the "Play Station", a console that would be compatible with both Super Famicom games and software released on a new format called the SuperDisc. Eventually, the partnership between Sony and Nintendo faltered due to licensing disagreements, but Kutaragi and Sony continued to develop their own console. Kutaragi later recalled staying up all night working on the console design for several nights in a row "because our work was so interesting."[1] Despite being considered a risky gamble by other Sony executives, Kutaragi once again had the support of Norio Ohga and several years later the company released the original PlayStation. The success of the PlayStation led to him heading up the development of more consoles like the PlayStation 2, and its successor, the PlayStation 3.

The commercial success of the PlayStation franchise makes Sony Computer Entertainment the most profitable business division of Sony. Despite being an upstart in the console market against veterans Nintendo and Sega, the first PlayStation displaced them both to become the most popular console of that era. The PlayStation 2 extended Sony's lead in the following generation, at one point holding a 65% market share with 100 million units shipped.[2] Ken was recognized by many financial and technological publications for this success, most notably when he was named one of the 100 most influential people of 2004 in TIME magazine[3] and the "Gutenberg of Video Games".

Since 1997, Kutaragi had been favoured to become the next Sony president. He enjoyed a close relationship with Sony CEO Norio Ohga, who had backed Kutaragi on the Sound Chip and PlayStation projects.[4] Ohga's successor Nobuyuki Idei promoted Kutaragi to Deputy Executive President, Sony-Global chief operating officer, and Vice-Chairman in 2003.

On November 30, 2006, Kutaragi was replaced as President of Sony Computer Entertainment by Kaz Hirai, the President of SCE America. In addition to other management changes, Kutaragi was promoted to chairman of SCEI, and retained his position as chief executive officer of the group.[5] On April 26, 2007, it was announced that Kutaragi would retire and instead take up the role of Honorary Chairman. Taking over his position would be then SCEI president and CEO Kaz Hirai, who would eventually be promoted to president and CEO of Sony.[6][7][8][9] On June 29, 2011, following the reshuffling of management, Sony announced that on June 28, 2011, Kutaragi had stepped down as honorary chairman of SCEI. Kutaragi relinquished active management of the business he created and built in 2007, when he stepped down as executive Chairman and Group CEO of Sony Computer Entertainment.[10] He has remained at Sony as senior technology advisor.

Although Kutaragi's leadership of consumer electronics was not successful, analysts also suspect that outgoing Sony CEO Nobuyuki Idei had set up Kutaragi to fail, given that both men had a cool working relationship. Idei assigned Kutaragi the tedious task of turning around the consumer division which had already been falling behind competitors such as Samsung in the LCD market.[4] Kutaragi's rival for the top position, Howard Stringer, was given the less difficult assignment of the content business and his success at Sony BMG Music Entertainment resulted in his promotion.

Sony Computer Entertainment, which Kutaragi had been heading since its inception, had a weaker year in 2004 after several years of solid growth.[13] During that same year, Sony’s game sales fell to $7.5 billion from $8.2 billion, and its operating income slid to $650 million from $1 billion, losing $25 million in Q4 of 2004. This can be attributed partially to the over-saturation of the video game market and price wars which caused the PS2 to lose the top sales position for a time.[14]

Kutaragi has labelled the Xbox 360 as "just an Xbox 1.5" and stated that it was "only going after PlayStation 2".[15][16] However, SCE Executive Tetsuhiko Yasuda did not consider Microsoft to be a competitor, and has said that they might consider working on games together.[17] In September 2006 Kutaragi admitted that the shortage of PlayStation 3 consoles to North America and Japan as well as the postponing of the consoles debut in Europe put Sony's strength in hardware in decline.[18]